Yekaterinburg will host games of the 2018 FIFA World Cup. In anticipation of the championship, a major reconstruction of the Central Stadium – which will be called Yekaterinburg Arena during the mundial – is ongoing. The local functionaries have made a good profit on the preparations to the World Cup – and it is quite possible that they get away with the money.

Aleksey P’yankov, Minister of State Property Management of the Sverdlovsk Region, and two his deputies have been charged with receiving multimillion bribes from local businessmen – but none of them is in custody. Powerful patrons of the suspects are taking all efforts to ruin this high-profile criminal case. It is necessary to note that machinations of P’yankov and his team are only a tip of the iceberg, and the investigators still have to figure out how much money had been embezzled during the reconstruction of Yekaterinburg Arena.

Suspects on the loose

Aleksey P’yankov, former Head of the Ministry of State Property Management of the Sverdlovsk Region (MSPMSR), was arrested together with his deputies on April 26, 2016 – but he had stayed in the pretrial detention facility for only a short time. Two months later, the ex-official has got out of jail: initially he was placed under home arrest and then released on bail of 2 million rubles. Recently the Leninsky District Court of Yekaterinburg has released the two other suspects in this criminal case.

Konstantin Nikanorov, Deputy Minister of State Property Management of the Sverdlovsk Region, who earlier was under home arrest, has been released on January 25, 2017. He has made a plea deal with the investigation and did not spend a single day in the pretrial detention facility.

Artem Bogachev, another Deputy Head of the MSPMSR, was released a day before. He must post a bail of 1 million rubles by February 8, 2017.

Artem Bogachev, Deputy Head of the MSPMSR, in the courtroom

By the way, Artem Bogachev does not rule out that he can return to his previous post; he is not ashamed of the corruption charges laid against him. Apparently, the ex-official is impressed with the example shown by his former boss: after the release, Aleksey P’yankov has become an Aide to the Governor of the Sverdlovsk Region – although he works on a volunteer basis.

Interestingly, the businessmen suspected of bribing the top functionaries of the MSPMSR – Vitaly Sivolap, Andrei Anisimov, Vladimir Vladimirov, and Andrei Druzhinin – have also been released on bail.

The investigation of the ‘MSPMSR case’ is still ongoing, but it seems quite possible that ultimately the officials could manage to get off the hook and avoid liability for all the machinations performed during the reconstruction of Yekaterinburg Arena. Apparently, the crimes committed by functionaries of the MSPMSR – that are currently under investigation by the Investigative Committee of the Russian Federation (ICR) – are not limited to a few bribes from businessmen. Public activists of Yekaterinburg suspect that the total scope of the corruption offences might reach hundreds of millions or even billions of rubles.

Evgeny Artyukh, a representative of the All-Russia People’s Front, is concerned that the ‘MSPMSR case’ could be ruined. Back in summer 2016, the investigation has already softened its position considerably. It turned out that Aleksey P’yankov has powerful patrons both in the federal center and Sverdlovsk region. Chances are high that all the blame for the committed machinations could be put on a subordinate of the ex-Minister, while the comprehensive investigation of MSPMSR operations would be soft-pedaled.

What are the charges?

The official web-site of the 2018 FIFA World Cup shows plenty of nice pictures illustrating the reconstruction of the Central Stadium in Yekaterinburg and its impressive appearance after the completion of the works. According to the architectural design, the arena would be able to host 35 thousand spectators. The playing field will be open, while the seats are to be covered with a stand roof. During the dark hours, the stadium will be artistically illuminated.

Reconstruction of the Central Stadium (Yekaterinburg Arena)

Officially the works performed with the facility are called “major reconstruction” – but in fact, this is a new stadium construction. The project designers have left intact only the facade of the building, which has a cultural heritage status as a monument of the Soviet neo-classical architecture.

According to the operatives of the 4th Investigations Department of the Main Investigations Directorate in the Sverdlovsk Region of the ICR, Aleksey P’yankov and his deputies had been receiving bribes from businessmen. The officials had assisted them to sell private buildings located around the Central Stadium of Yekaterinburg to the state at artificially high prices.

To perform the reconstruction of the sports arena, land lots and private homes surrounding the stadium had to be bought out and demolished. The list of these real properties included a building located at 5c Repina street, which has attracted attention of the investigators. Organizations belonging to businessmen Vitaly Sivolap, Andrei Anisimov, Vladimir Vladimirov, and Andrei Druzhinin were located in this two-storey office center with the total area of 1,700 square meters. The above businessmen were the owners of the building.

Their property had to be demolished, and in order to sell it to the state at the maximum price, the businessmen had been giving bribes totaling 31.5 million rubles to the superior MSPMSR management. As a result, the building was purchased at an artificially high price of 230 million rubles and demolished shortly after this.

Defendant Aleksey P’yankov during the trial

Seizures of documents related to that deal had been performed in the MSPMSR Executive Directorate State Unitary Enterprise back in October 2015, but the criminal case has been initiated only upon the completion of accounting and economic expert assessments. Initially the investigators had put the blame on Karina Gornostaeva, acting Head of the MSPMSR Executive Directorate. A criminal case had been initiated against her under Article 160 of the Criminal Code of the Russian Federation (misappropriation or embezzlement); she was suspected of machinations with acquisitions of real properties at artificially high prices. Damages to the regional budget in the amount of 55 million rubles had been incriminated to Gornostaeva. But later, in the course of investigation, the investigators have got hands on Aleksey P’yankov and his deputies.

Ministry of corruption

Taking the number of recent corruption scandals involving the MSPMSR, the institution can be called a ministry of bribe-takers. The most high-profile scandal was linked with the above-mentioned office building on Repina street. The investigation has been launched after the receipt of certain materials from the Sverdlovsk Regional Directorate of the Federal Security Service of the Russia Federation (FSB) by the Urals Regional Directorate of the ICR. The main suspect at that time was Karina Gornostaeva, acting Head of the MSPMSR Executive Directorate State Unitary Enterprise, who was suspected of offences under Article 201 of the Criminal Code of the Russian Federation (abuse of authority).

Then in April 2016, the investigators have got records of telephone conversations between superior officials of the Ministry of State Property Management of the Sverdlovsk Region. Based on these wiretapping materials, charges have been laid against the entire group of governmental servants. But such evidence had to be confirmed through the investigation, because none of the suspects had been caught red-handed during the handover of a bribe.

According to the telephone conversations, Konstantin Nikanorov, who used to supervise the preservation of historical and cultural monuments in the MSPMSR, received money from his childhood friends – businessmen Vladimir Vladimirov and Andrei Anisimov. Nikanorov gave a portion of that amount to another Deputy Minister – Artem Bogachev. The operatives have learned from Bogachev that ultimately, after all these complicated combinations, the money had been ending up in the pockets of Minister Aleksey P’yankov.

Konstantin Nikanorov, Deputy Head of the MSPMSR

Still, the telephone conversations between the functionaries were not sufficient to lay official charges against them; therefore, the investigation has made a deal with Konstantin Nikanorov, who turned his former colleagues in – after all, he used to work in law enforcement structures prior to the transfer to the MSPMSR.

It seems, however, that Aleksey P’yankov is being steadily pulled out from the criminal case related to the embezzlements and bribes in his Ministry. A recent decision of the Arbitration Court of the Sverdlovsk Region of September 16, 2016 is also beneficial for the ex-functionary. This decision states that the Regional Chamber of Audit had no right to estimate the buyout cost of the building located on Repina street. Therefore, the claim of the controlling entity that the purchase price of the above-mentioned real property was artificially high is ungrounded.

To prevent the powerful patrons of Aleksey P’yankov from ruining this case, the law enforcement operatives are currently investigating circumstances of other numerous offences committed by the ex-Minister. For example, MSPMSR used to provide lands to certain companies for next to nothing. A large number of violations were related to advertisement structures installed on the streets of Yekaterinburg. Businessmen willing to save their billboards and banners from demolition were literally lining up to give a bribe to Aleksey P’yankov or his deputy Artem Bogachev.

Documents seized by the law enforcement operatives during searches do not provide direct evidence of abuses – formally, all the papers drafted in the MSPMSR are virtually perfect from the legal point of view. According to insiders, questionable issues had been resolved through decisions of the Arbitration Court of the Sverdlovsk Region – which had been readily issuing required verdicts.

The regional business community also has lots of questions to the superior MSPMSR management. For example, Aleksey Golovchenko, Head of the Committee for Assessment of Regulatory Impacts of the Sverdlovsk Branch of Delovaya Rossiya (the Business Russia) Party, has complained on nontransparent property tax determination criteria for capital construction facilities. Over 300 real properties were expected to be affected by increased – up to hundred times – land rental rates, but the hikes have affected only some 40 facilities out of that amount. It is unknown why the Ministry had granted preferences to the remaining properties...

Furthermore, in 2014, the MSPMSR has altered the calculation procedure for land rentals. For some entrepreneurs, the cost of rent has increased by 1000 (!) times. Apparently, this was done intentionally to make the businessmen more ‘cooperative’.

Governor’s favorite

Obviously, Aleksey P’yankov enjoys patronage of Evgeny Kuivashev, the Governor of the Sverdlovsk Region. In November 2016, shortly after his release on bail, the ex-Minister has been appointed a Public Aide to the Governor despite the corruption charges.

P’yankov nearly returned to the chair of the Minister of State Property Management – at least, Evgeny Kuivashev has announced his intention to reinstate the functionary in his previous position. According to the official information, Aleksey P’yankov has declined this honor and said that he can become the Minister again – but only after the withdrawal of all charges against him.

Why Kuivashev is so loyal to the former Head of the MSPMSR? Apparently, during the reconstruction of Yekaterinburg Arena, P’yankov had been receiving multimillion bribes and kickbacks on a regular basis. The ex-Minister could share a portion of this money with the Governor. Allegedly, this is the reason why the Governor stands firm for him. In addition, should the investigators prove the guilt of P’yankov, inconvenient questions would be inevitably asked to Kuivashev as well.

Evgeny Kuivashev, Governor of the Sverdlovsk Region

Another interesting detail has popped-up recently. Valery P’yankov, father of the ex-Minister of State Property Management of the Sverdlovsk Region, was a course mate of Yuri Chaika, the Prosecutor General of the Russian Federation. They both had graduated from the Sverdlovsk Law University (currently the Urals Legal Academy). It is known that alumni of this university are meeting in Yekaterinburg on a regular basis to remember their youth. It is rumored that during one of such parties, P’yankov senior had asked the Prosecutor General to help his son.

Still, there are some honest law enforcement officers unwilling to ruin the ‘MSPMSR case’. Following an application from the investigation, in the end of 2016, the Sverdlovsk Regional Court has placed Igor Razunin, ex-Head of the Advertisement Department of the Ministry of State Property Management of the Sverdlovsk Region, under home arrest.

On the evening of December 22, 2016, FSB operatives have stormed into his office and found an envelope with 5,000-ruble bills left there after the visit of some businessman. Igor Razunin has been charged with bribe-taking on a large scale.

According to unofficial information, the Head of the Advertisement Department used to collect levies from Yekaterinburg companies. The cost of ‘zero problems’ with the MSPMSR was 150–350 thousand rubles per month.

The arrest of the official has done a really bad favor to those interested in smothering up the corruption scandal. It became known that not only were Razunin and P’yankov colleagues, but also had common business interests. The former Head of the Advertisement Department of the MSPMSR used to own Tekhstroy company – which had repeatedly enjoyed various preferences from the MSPMSR.

To avoid a lengthy prison term, Razunin might decide to tell the investigators everything he knows. Should he do so, all the efforts of Governor Kuivashev to get Aleksey P’yankov off the hook might end up really bad – primarily, for the Governor’s own career.